Available structure for a parent to buy a property on behalf of their children?

Question

In the UK....

If an elderly parent wanted to buy a property to live in, and have the property owned by their children so that it passes to them when she passes, what structures are available and what are pros and cons.

I can imagine 2 options:

1. She could buy the property and put it in the names of the children.
2. She could create a trust or some legal entity to own the property, and put that in the names of children.

The relevant goals here are:

1. The ownership is given to the children at the time of purchase and cannot be reversed.
2. The parent cannot be forced to move out of the property.
3. This arrangement is not related to her last will and testament.

Are there any established structures to make this work? Are there other details that would depend on the structure, for example tax?

Answer 1

Joint tenancy (as opposed to tenancy in common) would accomplish all of these goals. Joint tenancy gives each individual the absolute right to occupy the property (each person owns the whole property). If one dies the property automatically passes to the other joint tenant(s), which is known legally as the right of survivorship. The child(ren) could never force the parent(s) (other joint tenants) to vacate the property; on the inverse, however, the parent(s) could not deny the child(ren) the ability to also possess the property during their lives, if they so chose to do this. I am assuming if the children ran into hard times and needed to live there, it wouldn't be a problem, but this should be specifically addressed with the client.

For a valid joint tenancy to be created, you would simply need to have:

a. Unity of title: whereby the joint tenants must hold title to the property under one document (i.e., the title deeds);

b. Unity of time: the joint tenancy must start and end on the same date for all the joint tenants (end date being the death of the final joint tenant, who will/should have passed through will/trust to an heir the title interest;

c. Unity of possession: all joint tenants have equal rights to possess the whole property (as mentioned above, the children could occupy);

d. and finally, Unity of interest: joint tenants must have equal interests in the whole of the property.

This is the simplest way to do this while meeting all objectives.

Answer 2

As an alternative to joint tenancy, the property could be owned by the children with the parent having a Life Estate.

This would need to be set up by a lawyer and properly registered - there will be additional cost but it means that the children cannot move into the property without the parent's permission if this is a thing that matters to you.